Rolls-Royce has been backed by a consortium of private investors and the UK government to develop small nuclear reactors to generate cleaner energy.
The creation of the Rolls-Royce Small Modular Reactor (SMR) business was announced following a £195 million cash injection from private firms and a £210 million grant from the government.
It is hoped the new company could create up to 40,000 jobs by 2050.
However, critics say the focus should be on renewable power, not new nuclear.
Currently, about 16% of UK electricity generation comes from nuclear power.
Small modular reactors are nuclear fission reactors but are smaller than conventional ones.
The investment by Rolls-Royce Group, BNF Resources, Exelon Generation and the government will go towards developing Rolls-Royce’s SMR design and take it through regulatory processes to assess whether it is suitable to be deployed in the UK.
It will also identify sites which will manufacture the reactors’ parts and most of the venture’s investment is expected to be focused in the north of the UK, where there is existing nuclear expertise.
Rolls-Royce SMR said one of its power stations would occupy about one tenth of the size of a conventional nuclear plant, equivalent footprint of two football pitches and power approximately one million homes.
The firm said a plant would have the capacity to generate 470MW of power, which it added would be the same produced by more than 150 onshore wind turbines.
Warren East, Rolls-Royce chief executive, said the company’s SMR technology offered a “clean energy solution” which help tackle climate change.
Business and energy secretary Kwasi Kwarteng said SMRs offered opportunities to “cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further”.
“This is a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence”, he added.
SMRs are thought to be less expensive to build than traditional nuclear power plants because of their smaller size. Due to the nature of Rolls-Royce’s reactors, it is understood parts could be produced in factories and transported to sites by road, which would reduce construction time and costs.
At an expected cost of around £2 billion each, SMRs would cost less than the £20 billion each for the larger plant under construction at Hinkley Point and an anticipated, but not yet approved, sister plant at Sizewell in Suffolk.
If approved for use in the UK, it is understood Rolls-Royce SMR could build up to 16 reactors across the UK for electricity production.